Consumer review website Angie’s List Inc. jumped 25% after selling almost 9 million shares, raising nearly $115 million in its stock market launch. The Initial Public Offering price estimates the company’s value at over $900 million.
Angie’s List had aimed to sell less than 6.5 million shares, leaving 2.5 million to be sold by shareholders. BV Capital planned to take its 12% stake in the company down to under 9.5%, while Battery Ventures planned to cut its interest in the company from 18% to 15%.
Indianapolis-based Angie’s List provides appraisal of service providers such as electricians, gardeners, and dentists, and its 2010 revenue reached almost $60 million. That figure has risen to over $62.5 million through September 2011. The company’s net loss reached over $43 million, up from under $20 million compared with 2010.
The website, initially launched in 1995, attracts new markets with free memberships, charging monthly fees within two years of registration. The company held almost 180 paid markets at the end of September, adding 135 over a three-and-half year period. Access fees vary depending on the type of ratings sought and the viewing duration, ranging from under $3.30 to $5.20 per month or under $30 to less than $47 annually.
The site, which has over a million paying members, does not allow anonymous reviews. Angie’s List will use its recent earnings to invest in advertising and grow member numbers, concentrating on Los Angeles and New York.
Yelp Aims To Raise $100 Million In IPO
Angie’s List competitor, San Francisco-based web reviews site Yelp, is also set to go public, hoping to raise $100 million with its initial public offering to take place in 2012. Yelp, which provides reviews of local businesses such as bars and restaurants, earned over $58 million in 2011 through September, for an 80% rise on last year.
Yelp’s losses fell from almost $8.6 million in 2010 to just over $7.5 million. The site is free of charge to its users, and it generates most of its revenue from advertising. There are over 22 million reviews available on the site, with over 60 million users contributing.
Yelp, which was founded in 2004, plans to halve its daily-deal business staff, sending around 15 salespeople to other divisions.
Other big IPOs seen in 2011 include Groupon Inc. and professional networking company LinkedIn Corp, with Zynga Inc. to follow before the year’s end. Chicago-based web coupon leader Groupon raised $700 million on November 3, and stock jumped over 30% at initial trading. California-based LinkedIn sold almost 8 million shares of common stock in May 2011, raising over $350 million.
The sales attest to confidence in IPOs following a volatile period in the markets, which dissuaded startups from carrying out initial share sales, creating the largest accumulation of IPOs in over a decade.
Key Statistics – Consumer Review Influence (source: survey firm Harris Poll)
- Almost 35% of poll respondents post their opinions on companies on social media, just over 25% to criticize and under 24% to recommend products and companies.
- As many as 45% of respondents said they are influenced by social media reviews.
- Over 45% of respondents find the online option allows them to be honest, while under 40% express their opinions online in the hope of influencing others.